{"id":88359,"date":"2025-10-19T16:00:23","date_gmt":"2025-10-19T16:00:23","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/88359\/"},"modified":"2025-10-19T16:00:23","modified_gmt":"2025-10-19T16:00:23","slug":"gold-rush-ai-bubble-roaches-and-scent-of-fear","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/88359\/","title":{"rendered":"Gold rush, AI bubble, roaches and Scent of fear"},"content":{"rendered":"

The rise of the \u2018Magnificent 7\u2019 stocks since Liberation Day is striking\u2014the\u00a0CNBC Mag 7 Index<\/a>,\u00a0which slid to 250, is now at 405. Between them, the Mag 7 stocks\u2014Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta and Tesla\u2014are worth over $20 trillion, or more than the GDP of China. Nvidia, which dominates the chips market and hence the AI story, is up 32 percent; Microsoft, a major investor in OpenAI, is up 22 percent. It is being argued that the rise in AI stocks is debatable. The question ricocheting off Wall Street is where are the revenues? Critics flag the prevalence of\u00a0\u2018vibe revenues<\/a>\u2019\u00a0in the ecosystem and see parallels with the 1999 dotcom bubble. Interestingly, the biggest gainer in the S&P500 is Robinhood Markets\u2014up over 200 percent to $129 this calendar year.<\/p>\n

Like the scepticism about the quality and speed of the rise of stock indices is focused on AI stocks\u2014particularly after the trillion-dollar declarations of consanguineous nature\u00a0by chip-makers, buyers and infra developers. Indeed, OpenAI chief\u00a0Sam Altman<\/a>\u00a0believes, \u201cAI could be in a bubble.\u201d Bridgewater founder\u00a0Ray Dalio<\/a>\u00a0says the AI bubble echoes dotcom excesses.\u00a0Torsten Slok<\/a>\u00a0of Apollo Global avers that the AI bubble is bigger than the 1990s\u2019 dotcom bubble. Sceptics point out that several metrics such as\u00a0the Buffet Indicator<\/a>\u00a0on US market cap as a ratio of GDP and concentration of market leadership signal trouble ahead.<\/p>\n

What is troubling investors is that the indices seem to shrug off every live issue that must impact valuations. Mind you, the promise of \u2018liberation\u2019 is yet to be realised and the issue of trade deficits is far from settled. Tariff trackers illustrate the state of negotiations rather eloquently. For instance, the largest deficit is with China and the trade talks there are following a pretend-and-extend or rinse-and-repeat pattern. Last week, Trump threatened to\u00a0impose additional 100 percent tariffs<\/a>\u00a0on China, only to end this week arguing\u00a0it is not sustainable<\/a>.<\/p>\n

Like the award for the perfect diagnostic analogy for detecting rot must go to\u00a0Jamie Dimon<\/a>. The JP Morgan CEO said, \u201cWhen you see one cockroach, there are probably\u00a0many more<\/a>.\u201d Dimon deployed the analogy to highlight risks and frauds in regional banks and\u00a0private credit markets<\/a>\u00a0that have been haunted by \u2018mark-to-myth\u2019 valuation questions.<\/p>\n

Finally, the contest between hope and fear is best explained in the \u2018yaksha prashna\u2019 in the Mahabharata. The reality of mortality is visible on a daily basis, and yet, people seek to live longer, even immortality.\u00a0<\/p>\n

Read all columns by Shankkar Aiyar<\/a><\/p>\n

Shankkar Aiyar<\/p>\n

Author of The Gated Republic, Aadhaar: A Biometric History of India\u2019s 12 Digit<\/p>\n

Revolution, and Accidental India<\/p>\n

(shankkar.aiyar@gmail.com)<\/p>\n","protected":false},"excerpt":{"rendered":"The rise of the \u2018Magnificent 7\u2019 stocks since Liberation Day is striking\u2014the\u00a0CNBC Mag 7 Index,\u00a0which slid to 250,…\n","protected":false},"author":2,"featured_media":88360,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[363,138,66773,7619,220,111,139,69,231],"class_list":{"0":"post-88359","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-artificial-intelligence","9":"tag-business","10":"tag-gold-etf","11":"tag-gold-price","12":"tag-markets","13":"tag-new-zealand","14":"tag-newzealand","15":"tag-nz","16":"tag-us-stocks"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/88359","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=88359"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/88359\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/88360"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=88359"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=88359"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=88359"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}